"Association Maximization, the blog and e-newsletter" was created to help members of The National Association of Home Builders with professional growth, gain a better understanding of their HBA investment and maximize the return. This blog is for established members, new members and for non-members to demonstrate the reasons why investment in membership could help with professional growth. Some topics will also focus on other areas within the builders industry in general.

May 28, 2015

55+ Housing: Some Thoughts from the New Guy

My series of Generational Shifts articles concluded last week and I was amazed at how many positive responses and requests to utilize the series for HBA publications were sent to me. What pleased me was the comments by the very next generation I was writing about. The comments were mainly about how well I understood the next generation, at least as it pertains to the home building industry. It was only through asking questions and then listening that I was able to connect so many dots about the future of our association. One of the next generation builders, a young man with a wise mind and desire o continue his family's three generation building company, thought it would be a good idea to talk about his future in home building. Michael J. Kokes, an officer of the Shore Builders Association of Central New Jersey, is that third generation home builder. I knew his grandfather, Mike Kokes, a New Jersey Builders Association's Legend of Housing, and his father, Jan Kokes. I also know his uncle, Jerry Kokes. I'm amazed at how long I've been a member of our association to officially know three generations of builders. The Kokes Organization has been building since the early 1960's and has been a member of NAHB during that time as well.

Thank you, Michael, for your article and continuation of the home building profession and your desire to be an association leader and future president.

55+ Housing: Some Thoughts from the New Guy

by Michael J. Kokes

Michael J. Kokes

My family has made a name for itself by building age
restricted housing for the past 51 years. My grandfather started building
senior housing around 1964, with the start of Crestwood Village, and through
the decades my family has built nearly 20,000 units (not all age restricted).
Oddly, though, as I begin my journey as the next generation in the active adult
market I realize that the rules of the game have change. Some of the steadfast
norms that my family has adhered to for decades have change. Complicating
things further has been the prolonged recession. The areas I see the most
change in are our customers’ employment status, urbanization, non-qualification
due to dependents, and lack of product.

One
of the largest marketing challenges we have had to overcome, and still work on
every day, has been the employment status of our customers. What we have found
is that people either don’t visit our communities because they feel they won’t
fit in as they are still working, or that they can’t move in because they are
still working. Neither, of which is accurate! Actually, quite contrary, as many
of the people moving into our communities today are still working. To further
back this up, the Bureau of Labor Statistics states that for 2014 61% of all
people between the age of 55 and 64 are employed. 65 and older, and the number
is 18%. If you take the two numbers together, 38% of all people over the age of
55 are still working. Our way of overcoming this has been multi-pronged, as we
have changed the message and the medium for the message to reach our buyer.
Respectively, we have implemented campaigns of “living the retirement
lifestyle while you still work,” and utilizing more web based marketing.
According to some sources, 90% of the entire US population is on the internet
in some fashion. I believe it, as having a larger web presence, has been the
largest contributor to increasing our traffic.

In
the 60’s, the communities my grandfather started flourished due to the race
riots. As chaos and uncertainty ensued in the cities, people flocked to the
“country sides” of New Jersey. As the decades passed, more and more 55+ buyers
continued to move out to suburbia in search of a slower pace and more relaxed
environment. Content with the local doctor, mom and pop restaurants, and social
functions of the communities, our developments thrived. Today, more and more
55+ buyers are choosing to live in the urban environment, moving just outside
of New York City, in places like Hoboken and Jersey City. The cause, they want
to be closer to their kids and grandkids who still work in the urban areas, and
within walking distance of the finest arts, restaurants, shopping, and doctors
in the world. Finally, the modern day apartments offer virtually maintenance
free living. Who can blame them? Except, as someone who moved out of a condo
last year, let me tell you, the close proximity to others gets tiring real
quick. Our way of dealing with this change has been to explain the proximity to
mass transit, shopping, and major transportation arteries. Will this change
though, who knows, but if we continue to see the difficulties facing our cities
recently, you never know.

Although
this problem hasn't come to light as frequently as the others, I do believe
that it will become an ever increasing issue in the future. This issue is the
disqualification of living in our communities based upon dependents. This can
show itself in two ways. One, that many families are living with each other
intergenerationaly, as they still haven't fully recovered from the financial
crisis and two, that people are waiting till later in their lives to have
children. As a basis, the bylaws of any typical age restricted community, is
such that children under the age of 19 cannot live there. Additionally,
children under the age of 19 can only stay for approximately 1 month in
duration. The first situation is fairly self-explanatory, but let’s reviews the
second. According to the Census Bureau, the number of women delaying child
birth has risen exponentially. Surprisingly, women aged 35 and older has been
the largest contributor. Additionally, men have delayed child birth even later
then women, now choosing to have children into their 40s. Simple math shows
that this will hinder someone’s qualification for living in our communities.
Furthermore, history has shown that many people wait till their children are
“established” before making the decision to move into a 55+ community. Many
wouldn’t consider their children in their late teens or early twenties
“established.” As such, I feel that the 55+ model will become harder and harder
to sell to future customers.

Finally, this
complication may be more unique to New Jersey and the Northeast in general, but
it still needs to be discussed. Based upon various constraints like environmental,
municipal, and other complications, it is becoming harder and harder to source
larger plots of land to build 55+ communities. In my grandfather and fathers
era, it wasn’t unlikely to find 1,000+ unit jobs, today, we are lucky to find
something 200+. What we have found, is that it is much harder to make the
affordability and cost effectiveness of the various amenities available to our
customers. For example, the cost of an indoor and outdoor pool is much easier
to spread across 1,000 families, where this would be cost prohibitive in a
smaller development. Additionally, this isn’t just the upfront development
cost, but also the recurring Home Owners Association (HOA) fee. My thought is
that we are going to see less amenity rich communities in the future.

So are you
depressed with this information? Don’t be! The future remains bright for
homebuilding and 55+ communities as intelligent, young, aspirational people
continue to enter the industry. As with anything, I am optimistic that we can
overcome these and other future challenges that are presented to us. I know
personally that we, and other builders, remain dedicated to providing quality
and affordable housing in the New Jersey area.

About
the author: Michael J Kokes is the Vice President of Project Planning for The
Kokes Organization, a 51 year old real estate company located in Manchester New
Jersey, specializing in 55+ housing. Mr. Kokes is also a Director at Harmony
Bank, a community bank located in Jackson New Jersey, serving the Monmouth and
Ocean County communities. Additionally, Mr. Kokes serves as a Director and
Treasurer of his local home builders association, Shore Builders Association of
Central New Jersey as well as Pinelands Environmental Subcommittee chairman at
the New Jersey Builders Association. Mr. Kokes resides in Wall Township New
Jersey with his wife and son.

About Me

As an active home building industry professional, and with the good fortune of having volunteer leadership roles within The National Association of Home Builders (NAHB), I have gathered a vast knowledge about the home building industry from all sectors of the country as well as intimate knowledge of state and federal government legislation/regulations and their affects on the building industry. My industry connections have also been key to promoting branding efforts related to building products, services and expertise to builders of all disciplines. My national involvement has helped me create vast networking opportunities which continues to aid me in establishing national market exposure which flows to the regional and local markets. Through these efforts I have increased business expansion efforts, solidified business retention and foster closer relationships with current customers.

I began my home building industry career in 1981 as a self employed general contractor, primarily building custom homes, additions and renovations. I joined the National Association of Home Builders, as a builder member in 1986, switching to an Associate membership in 1992 when I decided on a career change within the building industry. Having enjoyed a career as a builder gave me the tremendous insight I have today with delivering product and service to the building community.

I have no doubt that the building industry's survival is due to NAHB's, including the local and state associations, dedication to the home builder's business, through protection and advancement, and helping others achieve home ownership and home enhancement. "If 'it' affects a builder 'it' will affect an associate." This quote has been a rallying cry I have expressed for years and it is the core reason that I am involved with building industry associations.